Ordinarily, the arrival of what Sun Microsystems calls the most sophisticated product in company history would be a gala affair. But the formal unveiling Tuesday of the top-end Starcat server had the tenor of a memorial service.

Sun Chief Executive Scott McNealy donned a dark suit--a rare sight for the typically informal and flamboyant leader--and opened the event with a moment of silence to recognize the death of Sun software executive Phil Rosenzweig, who was on a plane used in the Sept. 11 terrorist attacks. While the 340 Sun employees who had offices in the World Trade Center all were unharmed, "Our folks were victims, and they saw things they shouldn't have to see," McNealy said, visibly moved and his voice shaking.

New York native and Chief Operating Officer Ed Zander said Sun decided on Sept. 14 to move the Starcat unveiling to San Francisco. But on the urging of New York Mayor Rudy Giuliani to resume as much business as usual, they decided a few days later to move it back to New York.

"Doing a product launch--it seems so out of place," Zander said after seeing the New York devastation firsthand.

"Rudy said, 'Come do what you do,' and, well, this is what I do, gang," McNealy said, drawing applause and cheers.

As reported, Starcat--officially called the Sun Fire 15K--is Sun's new top-end server, with prices starting at $1.4 million and heading north of $10 million for high-end configurations. The server can accommodate as many as 106 processors and up to 576GB of memory, though most business customers aren't expected to use more than 72 processors. Sun is positioning the machine as a replacement for IBM mainframes and for groups of lesser servers that require more administrators.

"This is probably as significant a product and technology announcement as anything we've done in 18 years," Zander said.

"We are really narrowing the gap with the mainframe and are in fact surpassing the mainframe on several fronts," added Shahin Khan, head of server marketing.

Starcat, which arrived months later than originally scheduled, is important for several reasons besides mere sales revenue. For one, high-end server spending is multiplied by accompanying purchases of services, support, storage and software.

Unix servers are the biggest part of the server market, accounting for about $29 billion of the $60 billion overall server market in 2000, according to market research firm IDC. Servers are the powerful computers used to handle network tasks such as recording credit card transactions, hosting Web sites or recording corporate finances.

On a more abstract level, a company's future is judged by its technological prowess, and right now many are wondering how well Sun's designs will stack up against servers built around Intel's still-nascent Itanium chip and IBM's Power4 chip.

Fallout from attacks
The Sept. 11 attacks cast a pall over Sun's financial prospects as well. "We always count on a big September" to compensate for slower sales in the vacation-heavy months of July and August, McNealy said. "It was not helpful economically to have basically the week the U.S. economy stood still."

The attacks came after an already dark economy with slowing server spending. "There's no question the telcos invested like crazy" and now have more computing power than they need, McNealy said. "The dot-coms aren't around and are reselling a lot of equipment in the gray market, and the financial services world backed off big time as their transaction rates" decreased.

Sun, whose sales ballooned during the go-go Internet years and plunged when the bubble burst, now is emphasizing larger, more established customers in health care, energy, defense, manufacturing and intelligence. "Information technology is a discretionary item in the short run, optional in the mid-range. Long-term, it's mandatory," McNealy said.

Simplicity vs. complexity?
Sun said it will emphasize its message of simplicity when taking on IBM. Where software can run unmodified on the vast majority of Sun's servers, IBM customers are forced to pay Big Blue to deal with its hodgepodge of server chips, operating systems and software.

But complexity is the norm for the customers that buy high-end systems such as the Starcat, said Illuminata analyst Jonathan Eunice. "Customers like Sun's simplicity," Eunice said, but a complicated product portfolio can also mean a versatile portfolio. "When you start saying simplicity, there's a risk that...you're not really

using the right tool for the job. I think that's a risk that the simplicity argument runs in large, complicated enterprises."

At the unveiling, Sun demonstrated several high-end abilities of the Starcat. Topping the list was partitioning, a hardware and software feature that lets a customer divide a single Starcat into several independent computers. Sun first introduced its partitioning abilities in 1997 with Starcat's predecessor, the 64-processor E10000 "Starfire" system, which Sun will continue to sell for a year to a year and a half.

Partitioning, a feature available for years on IBM mainframes, is relatively rare in Unix servers. Hewlett-Packard, the second-largest Unix server seller after Sun, debuted partitioning with its Superdome server that went on sale in January, and IBM will debut its Unix server partitioning abilities with its Regatta server.

Cheaper by the pair
But IBM's approach, which uses virtual software partitions instead of Sun's more hardware-based designs, has some advantages over Sun's technology, including the ability to make partitions smaller than the four-processor minimum the Sun design permits, Eunice said. With some jobs requiring less processing power and Oracle charging about $30,000 to $40,000 per CPU to run its database software, it can be good to have partitions of one or two processors, he said.

Sun also demonstrated Starcat's ability to withstand hardware failures or changes without being shut down, running a job unfazed while several processor boards, input-output boards and a control board were removed.

This "hot-swap" ability is indeed an advantage over current IBM servers as well as the upcoming Regatta, Eunice said.

But in the big picture, the years when Sun could expect a vast lead over Unix server competitors are a thing of the past. "You can argue over individual features and functions of Regatta and Starcat until the cows come home," Eunice said. The real thing here is that Sun has not had a lot of competition" for top-end Unix servers of near-mainframe power. "Now they've got at least two big competitors, HP and IBM."